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Orrick Keeps Top Spot as Bond Counsel

In a year that saw a 30% increase in total long-term issuance, the municipal bond business picked up for most bond counsel firms in 2012, with a total amount of $370 billion of bond issues to work on.

Quarterly Rankings

Of those firms, Orrick Herrington & Sutcliffe LLP took in the most business, working on 366 issues that totaled $30.8 billion, according to Thomson Reuters data, which includes only long-term issuance. That is usually defined as issues with a final maturity of at least 1.09 years.

With an 8.4% market share, Orrick again nabbed the top spot among bond counsel firms. In negotiated issues alone the firm also ranked number one, with a total of $29.2 billion par amount.

“We’ve been pretty consistently ranked number one for about two decades and we’re very proud of this,” said Roger Davis, Orrick’s head of public finance. He said the reason for their success is pretty simple. “Our clients think well enough of us and the services they receive from us to keep hiring us as their bond counsel and as disclosure counsel, where we’re also ranked number one.”

Orrick served as disclosure counsel on 109 issues, totaling $15.6 billion. Kutak Rock LLP took the second spot with a total of $6.1 billion, and Stradling Yocca Carlson & Rauth came in third with $5.8 billion.

Davis said that other reasons for the law firm’s top rankings include their great team of bond and tax lawyers, as well as their diversification — geographically and in terms of the types of matters.

“You name it — anything that involves a public entity and finance — we’re probably working on a number of transactions in whatever category that may be,” Davis said. “So whatever is hot will play to one of our strengths, and whatever is cold won’t have a very large impact.”

With a total par value of $23.2 billion, Hawkins Delafield & Wood LLP again came in second. The firm participated in 360 issues, with a market share of 6.3% — up from 5.4% the year before.

“Hawkins has many clients that were doing large issues in 2012, especially refundings given the historic low interest rates in the market,” said Howard Zucker, a partner at Hawkins. “We also opened our eighth office in 2012, in Portland, Oregon, where the preeminent bond lawyers in the state of Oregon joined us.”

The firm ranked number one among underwriter’s counsel, as it did the year before, with 115 issues totaling $15.5 billion, and a market share of 5.9%.

Nixon Peabody LLP came in second for underwriter’s counsel, participating in 74 issues, totaling $13.2 billion. Orrick came in third with 133 issues, totaling $12.8 billion.

Getting back to bond counsel rankings on all issues, Sidley Austin LLP moved up one spot to number three, with 71 issues that totaled $15.2 billion. That compares to 59 issues totaling $10.7 billion the year before. The firm also saw its market share slightly increase to 4.1% from 3.9%.

“It mainly has to do with the continued strength of our clients who have weathered the economic storm over the past five years very well and they continue to need capital for their operations,” said Larry Bauer, a partner at Sidley Austin. “They trust us to provide them with high-quality and cutting-edge services.”

When Sidley moved up, Kutak Rock LLP moved down, to fourth place, with 334 issues totaling $14.2 billion.

Fulbright & Jaworski LLP took the fifth spot from Squire Sanders, coming in at $12.9 billion for 369 issues. At sixth place, Squire Sanders worked on 217 issues, totaling $10.8 billion.

Fulbright also took the fifth spot for underwriter’s counsel, with 317 issues totaling $11.2 billion.

“Like many we had a very positive year,” said Bob Dransfield, a partner at Fulbright. “We had favorable interest rates, aided a lot of the new-money projects that may have been postponed for awhile, and certainly aided a lot of the refinancings and refundings.”

Dransfield added that they are fortunate in representing solid clients with financing needs that the firm can help with.

“That’s what our focus point is — client service — and that’s going to continue to be our focus and direction going forward,” he said.

In the past year, Fulbright had a good year in the public power sector, as well as the transportation and public private partnership sector.

“That, coupled with our traditional public finance practice, cities, counties, school districts, those kinds of entities, just put together a very solid year for us,” Dransfield said.

Among the top 10 bond counsel, two new firms were added to the rankings in 2012. Foster Pepper PLLC took ninth place from 11th, with 89 issues at $7.2 billion. The firm also worked on the most competitive offerings, with 27 issues totaling $4.3 billion.

“We’ve been quite busy,” said Hugh Spitzer, a partner at Foster Pepper. “We’ve been very active representing public utility districts, and issuers in the energy sector, and very active with the state of Washington and the state of Seattle.”

Greenberg Traurig LLP moved to the 10th spot among bond counsel, up from 15th, with 89 issues totaling $7.1 billion.

The firms bumped down Edwards Wildman Palmer LLP to 14th from ninth place, and Chapman and Cutler LLP to 11th from 10th.

Among trustees, the Bank of New York Mellon led by dollar volume for a third consecutive year. In 2012, the bank participated in 861 issues, totaling $76.3 billion. That compares to 2011, when it worked on 802 issues at $62.9 billion. US Bank worked on 898 issues, slightly more than BNY Mellon, but with a lower par amount at $59.4 billion.

The bond insurance industry is still struggling, as the overall insured dollar amount continues its decline. For 2012, $13.3 billion was insured, compared to $15.2 billion in 2011 and $26.9 billion in 2010. In 2007, total volume was around $200 billion.

This year, the industry welcomed a newcomer — Build America Mutual Assurance Co. — which took second place among the three active bond insurers. Previously, Assured Guaranty’s two subsidiaries, Assured Guaranty Municipal Corp. and Assured Guaranty Corp., had been the only bond insurers with high enough ratings to write new policies. BAM has a AA rating from Standard & Poor’s.

AGM, which guarantees municipal bonds and international infrastructure financings only, was responsible for 99.7% of the market share, wrapping 1,157 issues for a total of $13.2 billion. That compares to 1,193 issues totaling $14.9 billion in 2011.

BAM, which made its debut in July, wrapped 4 issues in the remainder of the year, totaling $28.7 million.

Assured Guaranty Corp., which insures both public finance and structured finance obligations, wrapped two issues totaling $13.7 million.

In the letter-of-credit business, US Bank jumped five spots to rank number one, with 14 issues totaling $918.3 million.

Among guarantors, the Texas Permanent School Fund ranked first in 2012, as it did last year. It was involved with 316 issues worth $7.6 billion by par amount, a 29.1% market share.

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